Google Casts a Big Shadow on Smaller Web Sites – NYTimes.com

This article about the scary dependence of many small sites on Google Search starts with an interesting story about Nextag and how they dealt with the recent algorithmic changes implemented by Google that penalized sites with duplicate content:

In a geeky fire drill, engineers and outside consultants at Nextag scrambled to see if the problem was its own fault. Maybe some inadvertent change had prompted Google’s algorithm to demote Nextag when a person typed in shopping-related search terms like “kitchen table” or “lawn mower.”

But no, the engineers determined. And traffic from Google’s search engine continued to decline, by half.

Nextag’s response? It doubled its spending on Google paid search advertising in the last five months.

The move was costly but necessary to retain shoppers, Mr. Katz says, because an estimated 60 percent of Nextag’s traffic comes from Google, both from free search and paid search ads, which are ads that are related to search results and appear next to them. “We had to do it,” says Mr. Katz, chief executive of Wize Commerce, owner of Nextag. “We’re living in Google’s world.”